Tech juggernaut Amazon (AMZN) will report its second-quarter 2021 earnings on Thursday after the closing bell. The quarter is expected to deliver solid numbers for the company thanks to Prime Day 2021 sales, but analysts are concerned about how reopenings could affect Q3 forecasts.
The end of the second quarter also marks the end of founder Jeff Bezos’ tenure as CEO and the beginning of the Andy Jassy era.
Here’s what Wall Street expects from the company in the second quarter, as compiled by Bloomberg, compared to how the company performed in the second quarter last year.
Gain: $115.06 Billion Expected vs $88.91 Billion in Q2 2020
EPS: $15.75 expected vs $10.30 in Q2 2020
AWS Earnings: $14.18 billion expected versus $10.81 billion in Q2 2020
Amazon’s earnings come after Apple (AAPL), Microsoft (MSFT), Google (GOOG, GOOGL) and Facebook (FB) announced their own quarterly reports, with each company beating expectations for the previous quarter.
Amazon has gained momentum in recent quarters thanks to the impact of the pandemic on its e-commerce business. With so many people spending time indoors and dependent on delivery services, Amazon became a go-to for millions of Americans.
The company booked its $100 Billion First Quarter in Q4 2020 and also announced that it now has over 200 million Prime subscribers.
But reopening, thanks to vaccine availability and easier access to coronavirus testing, could weigh on Amazon’s Q3, especially given the tough comparisons to Q3 2020.
“For the third quarter outlook, aggregated BAC credit and debit card data suggests some headwinds will emerge in Q3 as the COVID-induced surge in e-commerce demand begins to slow and online penetration declines. as retail activity increases,” BofA Securities analyst Justin Post wrote in a comment to Amazon’s Q2 earnings report.
Amazon is also facing harsh regulatory headwinds, including an ongoing Federal Trade Commission investigation into the alleged use of third-party seller data to manufacture and sell its own Amazon Basics-branded goods.
The FTC is also reviewing Amazon’s planned $8.45 billion purchase of legendary Hollywood studio MGM to bolster its video offerings and better compete with companies like Netflix and Disney+.
The FTC could become a bigger thorn in the side for Amazon thanks to its new committee chair, Lina Khan. Khan, a staunch critic of Amazon, a former antitrust professor at Columbia Law School, rose to fame after publishing an article for the Yale Law Journal titled “Amazon’s Antitrust Paradox””, calling for changes to the current regulatory framework for antitrust cases.
Amazon is already calling on Khan to withdraw from the commission’s antitrust and MGM acquisition investigation.
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